The vacancy rate is a barometer of the health of a real estate market. Higher rates usually mean there’s more available space and tenants carry the upper hand in lease deals because they could move elsewhere. (If it's below 10 percent, landlords have the edge, because there are fewer options available.)

St. Paul's vacancy rate peaked in 2006 at about 25 percent. It dipped below 20 percent in 2010 before jumping up to 23 percent in 2011.

"It's the most positive this report has been since I've been involved," said Aaron Barnard, senior director brokerage services for Cushman & Wakefield/NorthMarq who has been based in St. Paul for seven years. "It shows constant demand in St. Paul."

This year's slight decline was fueled by the conversation of some properties from multi-tenant office space to owner occupied or other uses, such as residential. There were also a handful of small lease deals.

Class A vacancy, which only measures the six nicest office buildings in St. Paul, had a vacancy rate of just 12.7 percent, a decline from 13.2 percent a year ago. The class B space, which makes up almost two-thirds of the 6.6 million square foot downtown market, has a vacancy rate of 23 percent.

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